In the last couple of weeks, the Government has released some new and renewed schemes to aid businesses in the continued coronavirus pandemic.
Coronavirus Job Retention Scheme (Job Retention) Bonus scheme CJRB(JR)B
To qualify for the bonus, the employee must have remained continuously employed from the end of the last claim period for the Coronavirus Job Retention Scheme (‘CJRS’) through to 31 January 2021.
There is a one-off £1000 bonus available for every staff member brought back into employment, which is paid to the employer.
There is a minimum income threshold the employer must pay the employee.
This is a total of at least £1,560 (gross) throughout the tax months 6 November to 5 December 2020; 6 December 2020 to 5 January 2021; and 6 January to 5 February 2021.
Before employers can claim the bonus, they will to need to have reported all payments made to employees between 6 November 2020 and 5 February 2021 to HMRC through full payment submissions via real time information (RTI).
Employers will still be able to claim under the scheme, even if they are also receiving support from the job support scheme which will launch on 1 November (details on that below).
The scheme will not open for claims until 15 February 2021, and employers will have until 31 March 2021 to make a claim after which the scheme will close. No further claims will be accepted after this date.
Job Support Scheme
The Job Support Scheme is designed to protect jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The scheme will be open from 1 November 2020 to the end of April 2021.
Employers will be able to make a claim online from December 2020. They will be paid on a monthly basis.
Grants will be payable in arrears. This means a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
The company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
The Government will pay a third of hours not worked up to a cap of £697.92 per month, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus (details above) if they meet the eligibility criteria.
Employees must be on an employer’s PAYE payroll on or before 23 September 2020.
For the first three months of the scheme the employee must work at least 33% of their usual hours.
• For the time worked, employees must be paid their normal contracted wage.
• For time not worked, the employee will be paid up to two-thirds of their usual wage.
• Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee
After 3 months, the Government will consider whether to increase this minimum hours threshold.
Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
Example (provided by HMRC)
– Beth normally works 5 days a week and earns £350 a week.
– Her company is suffering reduced sales due to coronavirus.
– Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).
– Her employer pays Beth £140 for the days she works, and for the time she is not working (3 days or 60%, worth £210), she will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.
– The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer.
Self-Employment Income Support Scheme Extension (SEISS)
The extension will provide two grants and will last for six months, from November 2020 to April 2021.
Grants will be paid in two lump sum instalments each covering a three-month period.
The first grant will cover a three-month period from the start of November until the end of January.
HMRC will provide a taxable grant covering 20% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total.
The second grant will cover a three-month period from the start of February until the end of April. HMRC will review the level of the second grant and set this in due course.
The grants are subject to Income Tax and National Insurance Contributions.
To be eligible for the grant extension self-employed individuals (including members of partnerships) must:
- currently be eligible for the Self-Employment Income Support Scheme (although they do not have to have claimed the previous grants)
- declare that they are currently actively trading and intend to continue to trade
- declare that they are impacted by reduced demand due to coronavirus in the qualifying period (the qualifying period for the grant extension is between 1 November and the date of claim)
HMRC will provide full details about claiming and applications in due course, and we will update you at that point.
Apprentice Incentive Scheme
HMRC have introduced payments to support employers who hire new apprentices between 1 August 2020 and 31 January 2021. These employers will receive a payment of:
- £2,000 for apprentices aged 16 to 24
- £1,500 for apprentices aged 25 and over
The payment will be made in 2 equal instalments.
- Instalment 1: 50% after the apprentice completes 90 days of their apprenticeship
- Instalment 2: 50% after the apprentice completes 365 days.
To receive the full payment, the apprenticeship must last for at least one year.
The payment is different to apprenticeship levy funds so you can spend it on anything to support your organisation’s costs. For example, on uniforms, your apprentice’s travel or their salary.
You do not have to pay it back.
You can only apply for this payment for new apprentices who started their contract of employment between 1 August 2020 and 31 January 2021.
This payment is in addition to the £1,000 employers already receive for hiring an apprentice aged 16 to 18 years old, or under 25 with an education, health and care plan or has been in the care of their local authority
Employers can apply for an incentive payment after they have added new apprentices to their apprenticeship service account: how to register and use the apprenticeship service as an employer
As a Polite Reminder…
Our offices will remain open to clients on Thursdays and Fridays only.
The remaining days, the office telephone lines will be open, but no clients will be able to visit as we protect our most vulnerable staff members.
Should you visit our office premises on Thursday or Friday, we ask that you respect the measures put in place due to COVID-19, which include keeping a 1-metre distance from staff members, and wearing a mask.
We greatly appreciate your cooperation in this matter.